The National Audit Office has been asked to investigate HM Revenue and Custom's accounting for tax credits after it failed to reveal the amount of overpaid credits it has recovered from families.
David Law, the shadow Liberal Democrat Work and Pensions Secretary wrote to Comptroller and Auditor General Sir John Bourn after the Revenue said the information is not kept because in-year recovery is considered ‘part of the normal operation of the tax credit system’.
Laws said information on year-end recoveries showed an average of £1,028 is being recovered from over a third of the two million families that claim tax credits.
He said the issue of in-year recovery is important because rules limit recovery only after year end. The Revenue’s behaviour is: 'unacceptable because it is the in-year recovery of overpaid tax credits that frequently causes the most hardship, frustration and despair for recipients,' Law added.